Jan. 3 (Bloomberg) -- The Illinois State Employees
Association Retirees sued state officials and retirement systems
to block a plan that reduces pension benefits to fix a $100
billion shortfall.

The plan violates the Illinois constitution’s guarantee
that benefits of any state pension or retirement system “shall
not be diminished or impaired,” according to a complaint filed
yesterday in state court in Springfield, Illinois.

Illinois lawmakers last month approved a bill designed to
rescue the nation’s worst-funded public-employee retirement
system and restore the credit standing of the nation’s fifth-largest state. The bulk of the plan’s $160 billion in savings
over 30 years will come from limits on annual cost-of-living
allowances and raising the retirement age for some workers.

The retirees group seeks a court order declaring the bill
unconstitutional and establishing escrow accounts to house
pension funds withheld under the new plan.

State Treasurer Dan Rutherford was named as a defendant in
the case. Matt Butterfield, a spokesman for Rutherford, didn’t
immediately respond to an e-mail seeking comment on the
complaint.

The case is Illinois State Employees Association Retirees
v. The Board of Trustees of the State Employees’ Retirement
System of Illinois, 2014-CH-00003, Circuit Court of the Seventh
Judicial Circuit, Sangamon County, Illinois (Springfield).

To contact the reporter on this story:
Karen Gullo in federal court in San Francisco at kgullo@bloomberg.net